Simplified life insurance is ideal for any Canadian who doesn’t want to go through the prolonged process associated with getting life insurance coverage.

While online brokers, such as PolicyAdvisor.com, significantly reduce the time involved in applying for fully medically underwritten life insurance, simplified issue life insurance can be a quicker issue option for those needing coverage sooner.

Simplified life insurance coverage has no requirements for a medical exam. To apply, all you need to do is answer some simple questions regarding your health.

The waiting process is shorter and can oftentimes grant you immediate coverage. The tradeoff? Generally, premiums are higher for simplified coverage, and the coverage amount is lower than what you can get with traditionally underwritten life insurance.

Why should I consider simplified life insurance?

• Quick issue: Simplified life insurance makes it easy to obtain coverage quickly. There may be circumstances where you need coverage as soon as possible and can’t wait for the completion of a traditional underwriting process.
• No Medical Exam: You don’t have to go through a rigorous medical exam to apply for simplified coverage. This is perfect for people who either don’t like seeing doctors or nurses or would simply rather not go through the medical exam process in a face-to-face setting. Instead, applying for simplified life insurance involves answering specific health, lifestyle, and travel-related questions to determine your eligibility.
• Dangerous Occupations: Canadians who work in hazardous professions are often quickly disqualified from applying for traditional life insurance products. Many simplified life insurance policies don’t require the applicant to answer questions about their profession. This applies to those working in logging, roofing, mining, oil exploration, aviation, military and armed forces, offshore fishing, offshore oil and gas, professional underwater divers, professional entertainers (like stunt performers or drivers) and many other high-risk professions.
• Health Concerns: Those with underlying health conditions that may disqualify them from fully-medically underwritten life insurance can sometimes explore simplified life insurance. The medical questionnaire is usually between 1 and 25 questions, and generally more lenient about medical history.
• Extreme Sport Enthusiasts: Adventure sports like bungee jumping, cliff-diving, sky diving, and more can lead to exclusions and higher premiums with traditional life insurance. Non-medical, simplified coverage generally does not require one to disclose these activities.

Why shouldn’t I consider simplified life insurance?

• Increased Premiums: The biggest knock on simplified life insurance would be the generally increased premiums. You’re going to be paying a higher premium compared to traditional life insurance, which is to be expected considering the greater risk an insurer takes covering you without a medical exam.
• Coverage Needs: There are very few simplified life insurance policies that offer over $500,000 in coverage, and many will cap out between the $100,000 – $250,000 range. Traditional life insurance options will provide much higher death benefits; sometimes up to $10 million in coverage.

Who needs simplified life insurance in Canada?

There are many Canadians who would benefit from a simplified life insurance application process; but how are they supposed to know whether it’s the right fit?

If you have moderate to sever prior health concerns and need for life insurance, simplified life insurance is there to ensure that your family and loved ones will be taken care of after your passing.

The death benefit that comes with simplified life insurance can be used to cover mortgage payments, pay for funeral expenses, and help your family thrive well after you’ve passed on.

Simplified life insurance policies are great for those with limited insurance options due to their medical circumstances and lifestyle or require immediate life insurance coverage. Some common scenarios where Canadians choose simplified life insurance are:

• Older individuals
• Those in poor health or a history of health concerns
• Those who have explored their life insurance options and find they don’t meet the requirements for other policies
• Those needing immediate insurance coverage and cannot wait for traditional underwriting
• Those in dangerous professions who find themselves immediately disqualified for traditional life insurance coverage
• Those who participate in adventure sports who still want life insurance coverage

What types of simplified life insurance are available?

Simplified issue term life insurance and simplified issue whole life insurance are available for Canadians needing non-medical coverage.

Simplified issue term life insurance

Simplified issue term life insurance is a policy that covers you for a specified length of time, called a term, and pays a set amount to your beneficiaries if you die, within the term. There are different term lengths (such as 10, 15, 20, 25, or 30 years) available.

Simplified issue whole life insurance

Simplified issue whole life insurance is a form of permanent life insurance that provides you with coverage from the day the policy is settled until the day you die; in other words – for your entire life. As long as you pay premiums into the policy, the coverage never expires

Additionally, whole life insurance also combines this financial protection with investing. There is a cash value component associated with most whole life coverages.

Both types of coverage operate the same as their traditional counterparts, except for the simplified application process.

How is simplified life insurance different from guaranteed life insurance?

Simplified life insurance is different from guaranteed life insurance in one major way. Guaranteed acceptance coverage requires you to answer NO underwriting questions. Regardless of any health concerns, you will qualify for guaranteed coverage.

Because there are no medical questions asked, guaranteed life insurance is more expensive than other forms of simplified coverage. Guaranteed coverage always has a waiting period (typically 2 years) for the coverage to start; many forms of simplified coverage do not include this waiting period.

Read more about simplified issue vs guaranteed issue life insurance.

Is simplified issue life insurance worth it?

For many Canadians, simplified issue life insurance is undoubtedly worth the elevated premiums. The difference can be between getting simplified life insurance coverage or having no coverage at all. Regardless of your circumstances, you should speak with an experienced insurance advisor.

Having placed both simplified and traditional life insurance for so many Canadians, PolicyAdvisor can help you determine which coverage you might qualify for and how to get you the best policy for your insurance needs.

A major selling point for many insurance companies is that you can and should get life insurance when you are young and healthy before the appearance of any pre-existing health conditions. Your premiums are potentially much lower, and the curve balls life throws at you that can affect insurance rates have not yet left the pitcher’s hand.

In reality, life is not always so ideal. Canadians are susceptible to health events and chronic illnesses at any age. According to Stats Canada, more than one in five Canadian adults live with one of cardiovascular disease, cancer, chronic respiratory disease, or diabetes. 

If you are a Canadian with health problems, you might think that getting life insurance is impossible. Whether you’ve applied and been declined, or haven’t even started the process because you don’t think you’ll get approved, there are still options for you. 

Obtaining life insurance with health issues is possible – here’s how.

Can I qualify for life insurance if I have medical problems or pre-existing health conditions?

As mentioned, chronic illnesses and health problems can sometimes put a hard stop on your shopping for the right life insurance policy. The calculations used to determine someone’s eligibility for life insurance use past health scares and family medical histories to determine the risk involved in insuring your life. However, the primary factor they consider is your current health. While medical advances allow for those with pre-existing conditions and chronic illnesses to live a long life, health problems are still a risk factor in the eyes of insurance underwriters. 

Speaking with an experienced insurance advisor can be advantageous in this situation. They can guide you towards specialized policies and companies that are more accommodating of policy seekers with unique health circumstances. Keep in mind, there will most likely be more medical questions and heightened underwriting once you disclose any previous health problems; a pre-existing condition will potentially raise your insurance premiums, but modified policies and policies with exclusions for specific ailments are possible. Keep in mind, that only 4% of those who apply for life insurance are declined.

A licensed insurance broker can help you navigate your options and potentially find a policy that fits your needs.

Read more: Life Insurance With Diabetes.

What do I do if I don’t qualify for life insurance coverage due to my pre-existing health conditions?

If you don’t qualify for traditional – or fully underwritten – term life insurance, you may still have options. Some Canadian life insurance companies offer non-medical life insurance policies that suit the needs of those seeking coverage in these situations.

Accelerated issue life insurance allows for a medical exam waiver if certain metrics are met. A real-time questionnaire is part of the process. It evaluates age, the amount of desired coverage, and a medical overview based on your profile and previous answers. 

The ability to get a policy without a medical exam is the primary draw of an accelerated issue policy and they typically offer up to $1-million in coverage. Why may this not be the greatest fit? Quite simply, the questions are designed to determine whether you have any pre-existing conditions or health problems. You need to speak to a knowledgeable insurance advisor to see if you could navigate the edge cases of accelerated issue to receive coverage. 

The second type of non-medical insurance is a simplified issue. The brief, standardized application administers a short health questionnaire which may not be as comprehensive as accelerated underwriting. If you qualify for simplified issue life insurance, there is no need for medical underwriting. It typically offers up to $500,000 in coverage for a higher premium than accelerated underwriting.

While the questionnaire is brief, it serves the same purpose as the one above – to identify potential health risks in applicants. You should consult an insurance advisor before jumping into it; they can help you determine if you might qualify.  

The last type of non-medical insurance is guaranteed issue. It requires no health-related questionnaire or a medical exam and offers guaranteed acceptance regardless of medical history. It allows for life insurance with health issues at the cost of raised premiums and a lower death benefit (typically in the $25,000 to $50,000 range). Generally, you cannot claim the benefit until at least 2 years after you enact the policy. 

Read more about simplified vs guaranteed issue life insurance.

How do I get life insurance if I have health problems or pre-existing conditions?

Speak with one of our licensed advisors. As we mentioned, we have the experience to help you determine what insurance company will offer you the best rates or suggest a non-medical or guaranteed policy that takes into account your health conditions when you apply. Schedule a call with us below – we’re happy to discuss your coverage options and find answers for any of your lingering questions.

When you are applying for a mortgage, there are many different things that you need to prepare, like proof of income, employment verification, and other documentation. You might also be wondering if you need insurance, especially if you were offered group insurance by your lender or broker.

There is a common misconception that life insurance is required to get a mortgage in Canada.

Is mortgage insurance mandatory?

No, mortgage insurance is not mandatory in Canada. In some cases, you may require a specific type of insurance depending on your mortgage size and downpayment, but you do not need life insurance to get a mortgage.

Many homeowners instead choose to purchase term life insurance to ensure that their loved ones can maintain the mortgage in the event of their passing.

Some homeowners may be required to purchase mortgage default insurance because it is a prerequisite for their specific mortgage terms, but this is a very different type of insurance.

Is life insurance mandatory for a mortgage?

While it is not necessarily mandatory, purchasing term life insurance to protect your mortgage is invaluable because of the peace of mind you’ll get knowing your family won’t lose their home should something happen to you.

What insurance do I need to get a mortgage in Canada?

Earlier we mentioned a type of insurance that you may need depending on your mortgage; this type of insurance is called mortgage default insurance, commonly referred to as CMHC insurance because it is offered by a crown corporation known as the Canada Mortgage and Housing Corporation.

It is required when your initial down payment is less than 20% of your home purchase price, which must be below $1,000,000. You are also able to purchase mortgage default insurance from private mortgage insurers like Genworth Financial Canada.

Mortgage default insurance is designed to protect banks and lenders, but not homeowners. It may seem beneficial because it allows homeowners to get a mortgage for up to 95% of the home price, often with reasonable interest rates.

However, if you default on your mortgage payments for three months for any reason, your lender will take possession of your property, sell it, and submit a claim to CMHC for any shortfall. CMHC does not protect you or your family from losing your home. So what type of insurance does it?

Should I get mortgage insurance from my lender?

Mortgage insurance, often referred to as mortgage life insurance pays off the outstanding principal balance of your mortgage (up to a certain amount) if you die.

In Canada, mortgage insurance is a protection product, usually offered by your mortgage lender.

When you purchase this protection through your lender, the insured amount is directly tied to the value and term of your mortgage loan. This means you don’t get to choose your insured amount.

The amount of your coverage will also decline as your mortgage balance is paid off, but your premiums will not change. Combined with your monthly mortgage payment, these costs can add up.

Mortgage life insurance is expensive because there usually is no underwriting process completed for the application. This rigorous evaluation process helps insurance companies determine the costs associated with taking on the financial risk of your death.

When you choose to opt-in to lender-provided mortgage insurance, the lender is taking on more risk, and in turn, they pass the costs of this risk on to you. If you’re a healthy individual who has never smoked cigarettes, these policies are typically more expensive than term life insurance.

Because mortgage life insurance is typically sold without underwriting, it may be beneficial for people who don’t qualify for term life insurance for whatever reason. For the most part, however, mortgage life insurance policies are generally not a good idea.

There is no flexibility with mortgage life insurance, as most insurers send the payout directly to your lenders, meaning your beneficiaries will never see any funds from your insurance. With term life insurance, beneficiaries can use their insurance payouts for whatever they require.

What is the best insurance to cover my mortgage?

Term life insurance is the best option to protect your mortgage for many reasons, making it an easy choice over mortgage life insurance. Term life insurance covers you for a set period of time, with terms ranging anywhere from 10 to 30 years.

When you purchase term life insurance for mortgage protection, buying coverage for a long enough term to match your mortgage term (i.e. 20 or 30 years) would keep your insurance costs relatively steady. Term life insurance premiums are generally less expensive than mortgage insurance, especially if you are in good health.

You can have more confidence that your mortgage and loved ones will be taken care of with term life insurance. Mortgage protection through term life insurance provides you with the same security as mortgage life insurance through the riskiest years of your mortgage, with several more advantages not offered by lender-provided mortgage life insurance.

Term life insurance, once approved, is guaranteed to payout because of the medical and lifestyle underwriting process that is completed beforehand to ensure you qualify. Mortgage insurance is only underwritten once you make a claim, meaning there is no guarantee that the insurance will pay out.

Read our full review of the Best Mortgage Insurance Companies in Canada. 

The benefits of term life insurance as mortgage protection

Term life insurance is the most flexible choice for your mortgage protection needs. While the amount of coverage you receive with mortgage life insurance is directly tied to the amount of your mortgage loan, you can get coverage well beyond that amount when you choose term life insurance.

Because you can choose your coverage, you can cover all your debts, income replacement, and other needs (like funeral costs) with one policy. Most mortgage life insurance companies only pay your lender when you die, while term life insurance lets you pick your beneficiaries, such as your loved ones or another dependent.

Like mortgage life insurance, term life insurance will protect your family from having to pay your mortgage in the unfortunate case of your passing. However, unlike mortgage life insurance and other mortgage protection options, term life insurance provides many additional benefits that other options simply can’t match.

Buying a home is a significant milestone in one’s life. While navigating the process of setting up your mortgage, you are often offered mortgage insurance by your lender. Manulife Mortgage Protection is one such policy.

Is it worthwhile to purchase this type of coverage? Let’s find out!

This Manulife Mortgage Protection Plan Insurance review includes our ratings as well as details about their terms and coverage.

Head here for more details about mortgage insurance and mortgage protection.

Manulife Mortgage Protection Plan insurance rating and review

PolicyAdvisor strongly recommends choosing individual term life insurance instead of a lender provided mortgage protection policy. This advice remains the same whether the policy be from Manulife or any other source. With term life insurance, the amount would be paid out to the beneficiary(ies) you choose, (in most cases, your loved ones). This ensures you have adequate coverage in place to cover not just your mortgage, but also any other liabilities and also provide security to your family in case of your unexpected death.

Term life insurance is generally significantly less expensive in the long term. You can ladder your insurance policy so that the coverage decreases as you pay off your mortgage and other debt obligations. As your coverage decreases, so do your premiums.

Another important factor is flexibility – term life insurance has options for riders and benefits to customize your policy and extend coverage to your spouse and children. And, the coverage remains in place even if you switch mortgage lenders.

Lastly, If you prefer the Manulife brand, Manulife offers term life coverage up to $20 million and term up to age 100 through their Family Term policy among many of their other life insurance options.

If you are a business owner then you are keenly aware of the importance of keeping your personal and business assets secure. However, life insurance may not immediately stand out to you as a part of your business protection plan. You might assume that a life insurance policy is for protecting your family or dependents should something happen to you, and that’s it.

But what would your business do if something unfortunate happens to you? Would your business continue if your dependents were responsible for settling or maintaining your business in your absence? If the business has any loans outstanding, how would those be settled in the absence of the business owner? If you would prefer to have your family receive a payout for your shares, who would purchase them, and can you do something to have the business pay for the shares?

Getting life insurance as a business owner is not only an effective way of protecting a business but it also comes with several other benefits such as settling business loans, buying back your shares in the business, covering the cost of a replacement for you, and settling any liabilities of the business if it closes. Life insurance can help protect those that depend on you and even act as collateral when taking out a loan to grow your business.

Do business owners need life insurance?

When it comes to an individually owned life insurance policy, a business owner’s needs are no different than anyone else’s. Like everyone else, you as a business owner, want coverage to take care of your loved ones or dependents financially after you pass away. You may have taken out loans or lines of credit to get your business started and your estate would need to settle these, should anything happen to you. This could eat into your family’s savings or force them to make a tough decision like selling your home to settle any business-related debts.

A life insurance policy can also help you access loans for your existing business. Banks and lending institutions consider a life insurance policy as part of their credit evaluation— having life insurance may even be a requirement to secure a loan. In some cases, an aspiring business owner can even access the cash value from a policy to secure the initial funding they need. Or for established businesses using developing technology like Confiz to expand their operations, life insurance can help make sure those gains are secured in case anything happens in the future. 

But life insurance isn’t just a consideration for small business owners and entrepreneurs. Those who own or manage large businesses also need to consider the protection that life insurance can provide the business should anything happen to their key employees or business partners. For these reasons, business owners of any stature need to consider using life insurance policies in their business protection plan.

How can business owners use personal life insurance?

An individually-owned personal life insurance policy is important for most business owners to settle their personal finances such as: 

• Replacing the contribution you would have made to household income
• Personal debts like mortgage, car loans, credit card debt, or lines of credit
• Covering the costs of raising children or taking care of older dependents
• Children’s future education costs
• Augmenting retirement assets
• Creating an additional income source through those years
• Planning for end-of-life expenses
• Meeting legacy goals such as leaving assets for children and grandchildren

How can business owners use life insurance for business purposes?

Life insurance can also be used to settle business finances as well, depending on the business’ needs. Business owners can utilize business life insurance to provide: 

• Key employee retention – to fund a deferred compensation plan and provide supplemental retirement income to an employee or offer a larger death benefit protection to employees to attract and retain talent
• Key person insurance – to fund the cost to replace a key person or meet revenue shortfalls or any other operational losses arising from the death of an important business partner or employee
• Funding a buy/sell agreement – to facilitate a smooth transition of the deceased owner’s interest in the business to the surviving owners or liquidity for the deceased owner’s family
• Estate equalization– to ensure that assets are transferred fairly between beneficiaries
• Debt and collateral coverage – providing cash to pay off business loans and debts. Providing cash to help weather uncertain economic cycles, meet overhead expenses or provide supplemental cash flow

Whether it is through term life insurance or a permanent life insurance policy, a budding or established business owner would be wise to calculate how much coverage they need to ensure their family, business, and employees were taken care of should they die unexpectedly. Check out our online life insurance calculator to see how much coverage you need. 

Can a business own a life insurance policy?

Yes, a business can own a life insurance policy and stipulate themselves as the beneficiary if they have an insurable interest in the individual getting coverage. The policy protects the company’s financial interests. These policies are often referred to as COLI (company-owned life insurance) or in the case when financial institutions or banks own the policy, BOLI (bank-owned life insurance).

There are several advantages to owning a policy under a business such as utilizing the capital dividend account (CDA), protecting the policy against creditors, streamlined policy management, equitable sharing of premium payments, and reduction of the tax cost of the premium.

Are insurance premiums paid for by a corporation tax-deductible?

Whether or not your insurance premiums are tax-deductible depends on the company’s specific tax situation. In most cases, the premiums paid for by a company are not tax-deductible, but for some specific exceptions, they can still be financed by corporate dollars. In cases, where the policy is being used as collateral for a loan, premiums may be tax-deductible for the company. Premiums paid on behalf of employees, such as in the case of group life insurance, where the employees are the beneficiary of the policy, may also be tax-deductible. However, in such cases, premiums paid may become a taxable benefit to the employees. 

Since corporate tax rates are usually lower than personal tax rates, paying for a whole life policy with after-tax corporate dollars is usually more efficient than using after-tax personal dollars. Many business owners, therefore, prefer to have their life insurance coverage be owned and paid for by the business.

How does corporate-owned life insurance work?

The corporation buys a permanent life insurance policy on an employee’s life to protect the value of the corporation. The corporation becomes the policy owner, pays the premiums, and is also the beneficiary of the policy. The premiums are paid monthly or annually from the corporation’s cash flow, or by transferring funds from investments the corporation owns. 

Upon the passing away of the insured individual, the corporation makes a claim on the death benefits. Once the insurance proceeds are received, they are not taxable to the corporation. The company can notionally add the value of the proceeds (net of any adjusted cost basis) to the company’s capital dividend account, a notional account used. The capital dividend account is a notional account that can be used to pay out the life insurance proceeds tax-free to shareholders as a capital dividend. An amount equal to the capital dividend account can be paid out of the corporation at any time as desired by the beneficiary as a tax-free capital dividend. Any amount remaining can be paid as a taxable dividend.

What are the different types of life insurance for business owners?

There are two main types of insurance: term insurance (10,20, 30 years, etc), and permanent insurance (for your entire life).  

Term insurance 

Term life insurance is life insurance that lasts for a specific period of time known as a Term. The term can be a fixed number of years or until you reach a certain age (e.g. age 65). You pay premiums to the life insurance company until the expiry of the term. In return, your beneficiaries are entitled to receive a tax-free death benefit if you die within the term of the policy. Once the term ends, your coverage also expires, and you can stop paying premiums.

A term life insurance would be an ideal product to meet the needs of a small business that has short-term debts, such as mortgages or loans, and is looking for a policy with a lower premium.   

Permanent insurance 

Whole life insurance (sometimes called permanent life insurance) covers you for life and there is an investment or cash value component associated with your policy and its lump sum, tax-free payment. As you pay into your permanent insurance policy over time, it builds investment value.

Universal life insurance (UL) is a type of permanent life insurance that combines lifelong coverage with flexible payment options and an investment component. Universal life insurance offers a way to maintain coverage while also building wealth for your beneficiaries. It has the added benefit of allowing you to tailor the cost of your insurance premiums and investment options.

Term-to-100 insurance plans are a whole life insurance policy that doesn’t have a cash-out option, so it only pays upon your death (making it a little cheaper). It offers a bridge between term and whole life insurance. Plus, if you make it to 100 years, you are no longer required to pay premiums and still retain the coverage.

Permanent insurance is ideal for business owners who are looking to leverage life insurance’s cash value to benefit their business. Many permanent life insurance products have investment components and opportunities to actively manage those investments.  

How much life insurance do business owners need?

Determining your life insurance needs will vary depending on your personal and business needs. The sweet spot for how much life insurance you need may not be obvious. You don’t want to choose a policy with so little death benefit that it won’t cover any outstanding debts as well as the cost of living for those you leave behind.

At the same time, choosing an amount that’s too large may prove costly for the premiums you pay while you are alive. What if you realize you may not have needed that much insurance coverage and could have saved some money?

A common rule of thumb is to choose 8-10 times your annual income as your death benefit. 

For personal life insurance, take into account any debts you have, your family’s living expenses, future education needs of your children, plan for end-of-life expenses and any other allocations (for example, charitable donations) you may want to make.

For business life insurance, take stock of your business loans, inventory costs, costs to replace key employees, costs to buy you out of the partnership after death, etc. After tallying all your business needs, you may come to realize that setting up a business-owned life insurance policy can give you bonuses beyond that of a personal life insurance policy. 

Find out the cost of whole life insurance for your unique needs.

How do I get life insurance if I’m a business owner?

Getting a life insurance policy is the same whether you are a business owner or work in any other profession. An independent broker like PolicyAdvisor can help you sort through your options, find you a quote, and advise if your insurance needs are growing beyond that of a personal broker. We can also collaborate with tax lawyers to ensure that your business will be passed down in a tax-efficient manner. Reach out to our experienced advisors below and they can get you started down the right path for covering yourself and the business you’ve built.

The information above is intended for informational purposes only and is based on PolicyAdvisor’s own views, which are subject to change without notice. This content is not intended and should not be construed to constitute financial or legal advice. PolicyAdvisor accepts no responsibility for the outcome of people choosing to act on the information contained on this website. PolicyAdvisor makes every effort to include updated, accurate information. The above content may not include all terms, conditions, limitations, exclusions, termination, and other provisions of the policies described, some of which may be material to the policy selection. Please refer to the actual policy documents for complete details. In case of any discrepancy, the language in the actual policy documents will prevail.  All rights reserved.

If something in this article needs to be corrected, updated, or removed, let us know. Email editorial@policyadvisor.com.

Empire Life Critical Illness Insurance rating and review

With a well-rounded mix of terms and features included in their critical illness insurance plans, Empire Life provides a great, comprehensive product. They also offer what is called a multi-life policy. Couples can apply together for critical illness insurance and get a discount.

Pros and cons

Navigating the ins and outs of buying life insurance is a feat in itself, but what happens when you need to change or transfer your life insurance policy? The answer is not always clear, so we’ve set out to answer some of the most common questions about transferring, changing, and selling life insurance policies in Canada.

Can I transfer my life insurance policy to another company?

In general, it is not possible to transfer a life insurance policy from one insurance provider to another. This is because of the underwriting involved in the approval process as well as factors that can affect the cost of life insurance over time, such as age and health conditions. In other words, the factors that made you eligible for the original life insurance policy may no longer apply. 

While transferring a policy between companies isn’t an option, policyholders can opt to change their policy altogether or obtain multiple life insurance policies if needed. 

There are potential benefits to changing your life insurance policy and provider. For example, if your health has improved significantly since the original application or your life insurance policy has renewed after its original term, you could qualify for cheaper life insurance premiums. 

Opting for a different type of insurance, such as term life over permanent life insurance, can also lead to savings down the line. On the other hand, there are hurdles to changing your coverage, such as higher premiums associated with age or, in some cases, even being uninsurable.

Another thing to consider when switching life insurance providers is that you will have to restart the incontestability clause built into some contracts: essentially a period during which the death benefit can be contested for any misrepresentation of material information. There is of course less reason to be concerned if you are sharing all relevant lifestyle and medical information accurately.

Similarly, when you start a new coverage, the suicide exclusion clauses restart as well. This clause (built into almost all life insurance policies in Canada) usually states that the benefit will not be payable if the cause of death within the first two years is from self-inflicted harm. (Read more about how suicide affects life insurance.)

Your insurance company may however transfer your coverage to another company. In cases where an insurance company goes bankrupt or gets acquired by another provider, the company that issued the policy and the one that pays it out or renews your coverage may be different. 

Can I transfer my work benefits life insurance policy to an independently owned policy?

While many employers offer their employees basic life insurance as part of work benefit programs, this type of life insurance does not continue when an employee quits or loses their job. In cases where an employee is simply changing to another job with group benefits that include life insurance, this is not an issue. 

In other circumstances, some work benefit policies do enable the insured to switch to an individual term policy or convert to an individual permanent life policy (where you continue coverage without having to requalify with medical underwriting) for a limited death benefit and at an elevated cost. Once the policy is switched or converted to the individual, however, premiums are typically more expensive than they were under the group terms.

For this reason, many people supplement their work benefits life insurance with their own policy. This solves many of the challenges associated with employer-provided life insurance, including not enough coverage for spouses or dependents and its reliance on maintaining the full-time position.

Can I transfer my life insurance death benefit to someone else?

The short answer to whether you can transfer a life insurance death benefit to a different person is yes. But there are different ways of proceeding depending on whether the beneficiary is revocable or irrevocable, a common distinction made for couples’ life insurance. 

In the case of a revocable beneficiary, the policyholder has the ability to change the beneficiary without their express consent. In the case of an irrevocable beneficiary, the policyholder needs to obtain the beneficiary’s signature to make any policy changes. 

It is advisable to keep the beneficiary as revocable to give the policy owner maximum control over the policy. However, in some cases, you may be required to keep the beneficiary type as irrevocable. This could happen because you choose to or in many cases because a judge has ordered you to do so. Many divorce settlements or judgements will require a partner to hold life insurance to cover alimony or education costs for kids in case of their death. Read more about life insurance and divorce.

Can I transfer my life insurance ownership to someone else?

It is technically possible to transfer your policy to a different individual or owner during your lifetime.

However, there may be some tax considerations involved depending on what type of policy is being transferred and whether it is transferred to a related party (such as a family member) or an unrelated party (such as a corporation or a charitable organization). 

While it’s desirable to avoid life insurance transfers and the related tax consequences entirely, it’s not always possible to foresee how and when personal relationships and business circumstances may evolve.

These are a few of the scenarios in which the transfer of a policy may be intended or become necessary, as family or business relationships change: 

• From parents/grandparents to a child
• Between spouses/common-law partners
• Transfer of a policy to a sibling (usually on the life of a parent)
• From and to your corporation 
• To a charitable organization

Generally speaking, when you transfer ownership of any capital asset to a third party, it is treated as a disposition and may lead to taxable capital gains. Similarly, a transfer of a policy’s ownership is also typically treated as a taxable disposition of the policy and can lead to a taxable gain. In the case of life insurance, however, such taxable policy gain is treated as part of income for the transferring policy owner. Policy gains cannot be offset against capital losses.

When a policy has to be transferred, the tax implications are calculated based on the difference between the greatest of the Fair Market Value ( FMV) of the consideration received (if any), the Cash Surrender Value (CSV) on that date, and the Adjusted Cost Base (ACB) of the policy. 

Thus, if the deemed value of the policy exceeds the ACB, the extra amount may be considered as income and hence become fully taxable. 

There are some exceptions that allow for a tax-free rollover of a policy with no immediate consequences.

These exceptions happen when such transfers are:

• Between living spouses or common-law partners who are Canadian residents
• Transfer to a child, who is also the insured and for no consideration 
• When there is no cash surrender value (for example, with the transfer of a term life insurance policy) and no associated consideration is paid

When you transfer policy ownership, the tax consequences can be different and significant, based on your unique circumstances. Speaking to an advisor and/or a tax consultant will help you make the right decision.

Can a life insurance policy be transferred after death?

When a person dies, the assets left behind are first transferred to an estate and then transferred to the claimant of the estate. This disposition of a policy results in a gain being evaluated that has to be paid in the final income returned for the deceased. Therefore it is important to appoint a contingent policy owner that meets the tax-free rollover requirements in order to secure a tax-efficient transfer upon death of the insured.

Can I sell my life insurance policy to someone else?

Though selling life insurance policies is common practice in the United States, its application remains complex within Canada. In certain provinces (Quebec and New Brunswick) it is legal to sell your life insurance policy to a third party through what is called a life settlement or viatical settlement. In most provinces, life insurance sales for a viatical settlement are prohibited. In Ontario, it is not legal, despite ongoing attempts to change the law and some insurance providers outright prohibit the practice, regardless of its legality.

Where it is legal, a life settlement consists of selling a permanent life insurance policy to a third party for a greater sum than the policy’s cash surrender value but less than the full death benefit. Essentially, the original policyholder is paid a lump sum for the policy, while the new owner continues to pay the premiums and is entitled to the full benefit when the original policyholder dies.

There are a number of reasons one might want to sell their life insurance policy. For instance, an elderly person whose retirement fund is running low may wish to stop paying monthly premiums and receive a lump sum of money to continue paying for housing, care, or anything else their budget needs at that time. 

In places where life settlements are not permitted, the option would either be to surrender the policy for cash, take out a policy loan, or transfer the policy, although each of these options may have tax implications which you should discuss with your tax advisor.

In the same way that personal insurance protects people from financial pitfalls in difficult circumstances, reinsurance is a risk management strategy that shields insurance providers from major losses. Keep reading to understand what reinsurance is, how it works, and how it can affect your insurance application.

What is reinsurance?

In the simplest terms, reinsurance is insurance for insurance companies. It enables the insurance companies to protect themselves in the same way that car, home, and life insurance offer financial protection to individuals in times of need. 

In more specific terms, reinsurance is a type of protection that insurance providers buy to minimize their risk in the event of major claims, such as a natural disaster. Be warned! Reinsurance is not a topic everyday Canadians jump into that often. It is a complicated insurance concept that is impossible to describe without a hint of jargon.

With that said, reinsurance allows insurance companies to share liability with other firms, especially in cases where the primary insurance company does not have enough cash reserves in place to pay out claims. 

This functions to keep insurance providers afloat when large or multiple claims are made and ensures that claimants will receive the benefit they are entitled to.

How does reinsurance work?

Reinsurance has been used by insurance providers for centuries and today is used in virtually all corners of the insurance industry. Its main function, as mentioned, is to spread out risk across different insurance providers and minimize losses in extreme circumstances. 

For example, if a natural disaster ends up destroying or damaging thousands of homes in a region where one insurance company provides the majority of home insurance, that company would be hard-pressed to cover all the claims. 

By leveraging reinsurance, however, the insurance provider can draw from other insurance companies to cover the losses while avoiding insolvency. In this respect, reinsurance not only protects insurance companies but also their clients, who are thus guaranteed coverage.

In addition to mitigating risk in extreme circumstances, reinsurance also enables insurance companies to increase their coverage capacity. Insurance companies are better equipped to take on clients with larger policy coverage because reinsurance will mitigate losses if/when the coverage is claimed. This is particularly useful because it enables insurance companies to take on more clients without increasing capital reserves accordingly.

How does reinsurance affect your life insurance application?

While reinsurance agreements between insurance companies do not often have a direct impact on individual insurance applications, they do influence the insurance market and consequently can play a role in insurance applications and outcomes.

The first major impact for insurance applicants has to do with the fact that reinsurance helps to stabilize the insurance market by mitigating risk. Because reinsurance spreads risk and enables insurance companies to take on more policies without drastically increasing capital, insurance providers are in a better position to cover higher-risk applications. In other words, reinsurance can actually improve the chances of coverage for insurance applicants. 

Reinsurance also has a role to play in the rate of premiums. Global trends, from climate change to mortality data, are monitored closely by reinsurance companies, especially when they lead to claim increases. Reinsurance companies, therefore, see these trends as potential risks and adjust costs accordingly, which trickles down to the consumer and their policy rates.

Finally, if an insurance provider is working with a reinsurer on a facultative basis (see types of reinsurance below), then an insurance application may take longer to process. This is because reinsurers have their own underwriting processes for each insurance policy, which can increase processing times. And because reinsurers can decide to only take on part of the risk, the ceding insurance company must find other reinsurers, which can also tack on time.

For example, if you are applying for a life insurance policy and have some pre-existing health conditions, your primary insurance provider may need to check with their reinsurer to confirm they will take on the risk of insuring you. In turn, this could mean your application is approved, approved with a rating, or approved with exclusions due to your pre-existing condition.

What are the different types of reinsurance?

While there are many types of insurance one can buy, there are just two main types of reinsurance: treaty reinsurance and facultative reinsurance. 

• Treaty reinsurance is a type of contract signed between the primary insurance company—the ceding company—and the reinsurance company in which the reinsurance company takes on all risks for a specific class of insurance policy over a set period of time. Treaty reinsurance is typically a long-term agreement between the two parties, with terms being renegotiated on an annual basis. Treaty reinsurance agreements are also notable because they do not require individual underwriting.
• Facultative reinsurance contracts, by contrast, are made on a more selective basis. While treaty contracts tend to cover an insurance company’s entire portfolio or large swathes of it, in the facultative approach, the ceding company offers an individual risk or package of risks to the reinsurer, who is then in a position to approve or reject it. In the case of facultative reinsurance, the reinsurer does its own underwriting for the policies it is presented with and each is treated and approved individually. 

The ad-hoc nature of facultative reinsurance means that it is conventionally used for high-risk policies (such as no medical insurance). In some cases, the primary insurance company may have to shop around with several reinsurers to cover the entire liability.

Reinsurance agreements can also be classified as proportional and non-proportional. Proportional reinsurance agreements stipulate that the insurance company and the reinsurer share losses as well as premiums. Non-proportional agreements are structured in such a way that the ceding insurer covers a set amount of risk, while the reinsurance company covers losses over a certain threshold.

Which are the biggest reinsurance companies?

The insurance market is populated with many providers, some of which specialize exclusively in reinsurance and some which offer reinsurance as part of a broader portfolio. Many of the largest reinsurance companies work globally, partnering with primary insurance providers across several continents. According to S&P Global, the top 10 biggest reinsurance companies based on net premiums written in 2019 were:

• Swiss Reinsurance Company Ltd., based in Zürich, Switzerland
• Munich Reinsurance Company, based Munich, Germany
• Hannover Rück SE, based in Hannover, Germany
• Berkshire Hathaway, based in Nebraska, United States
• SCOR SE, based in Paris, France
• China Reinsurance Corp., based in Beijing, China
• Reinsurance Group of America Inc., based in Missouri, United States
• Lloyd’s, based in the United Kingdom
• Everest Re Group Ltd., based in Bermuda
• PartnerRe Ltd, based in Bermuda

The information above is intended for informational purposes only and is based on PolicyAdvisor’s own views, which are subject to change without notice. This content is not intended and should not be construed to constitute financial or legal advice. PolicyAdvisor accepts no responsibility for the outcome of people choosing to act on the information contained on this website. PolicyAdvisor makes every effort to include updated, accurate information. The above content may not include all terms, conditions, limitations, exclusions, termination, and other provisions of the policies described, some of which may be material to the policy selection. Please refer to the actual policy documents for complete details. In case of any discrepancy, the language in the actual policy documents will prevail.  All rights reserved.

If something in this article needs to be corrected, updated, or removed, let us know. Email editorial@policyadvisor.com.

If you are in the market for a permanent life insurance policy, you may have noticed that many policies highlight the added living benefit of something called cash value. The following article will illuminate the concept of cash value and demonstrate how it can be used as a strategic part of long-term financial planning. Cash value provides an opportunity for you to benefit you now and your family’s future later.

What is cash value life insurance?

Cash value is included with certain types of permanent life insurance, like whole life insurance and universal life insurance. A portion of your premiums is placed into a savings account or investment portfolio by your insurance provider. Essentially, cash value is a sum of money that builds up over the course of your life insurance policy—it’s what your policy is worth. 

Read more about whole vs. universal life insurance. 

Every time you pay your policy premiums, a portion of the money goes towards paying for your death benefit, a portion goes to fees, and another portion is earmarked for investment. This money—the cash value—typically increases over time due to interest and investment earnings. Policyholders can choose to withdraw their cash surrender value or can take out loans using their policy’s cash value as collateral. Additionally, life insurance cash values grow on a tax-deferred basis, meaning they are not subject to tax until funds are withdrawn. We’ll talk about that more in later sections. 

Some policies, including participating whole life insurance and universal life insurance, generate additional funds from their cash value dividends that the policyholder can utilize to pay their insurance premiums, invest back into the policy as additional death benefit coverage, or for further investment.

A note about cash-back or money-back insurance

Life insurance with cash value should not be confused with cash-back or money-back insurance. Cash-back insurance is term life insurance product that issues survival benefits at regular intervals throughout the coverage period. In other words, policy holders receive a percentage of the death benefit as they progress through their term. Cash-back insurance is not available in Canada.

What is the difference between a policy’s cash value and its death benefit?

There are a couple of key differences between a life insurance policy’s cash value and the death benefit. The death benefit is the money paid to a policy’s beneficiary when the named insured dies. Life insurance companies will issue a death benefit as long as policy terms are met and the insured person dies during their coverage period. 

Unlike the death benefit, cash value can be accessed while the policyholder is still living. For this reason, it falls into the category of a “living benefit.” This means that the policy’s cash value is intended for use by the policyholder, whether the money is withdrawn during their lifetime or used for loans. 

Another difference between the two is the gains made on the cash value of a policy can be treated as taxable income when they have been withdrawn, whereas beneficiaries do not have to pay taxes on a death benefit they receive.

How long does it take to build cash value on life insurance?

In general, it can take at least a decade to build up substantial cash value for a whole or universal life insurance policy. This is because it takes time for the cash value (what you pay through premiums) to accumulate and begin earning investment income and/or interest. After 10-15 years, the cash value of a policy will begin to grow at greater rates.

That being said, if accelerating the growth of your policy’s cash value is a priority, you have a couple of options. For instance, you can choose a limited pay whole life insurance policy. Some options include condensing your life’s worth of premiums into an 8, 10, 15, or 20-year-pay plan. Because your premiums are paid up earlier, that money is used to invest earlier in the policy’s lifespan, meaning there is more time for the investment to grow.

How can you access the cash value?

There are a few ways to access your life insurance policy’s cash value: you can withdraw money, use it for loans, use it to pay your premiums, or surrender your policy for cash. In each scenario, there are some things to take note of.

Withdrawals

While withdrawing money from your policy’s cash value is an option, there are caveats. Depending on the size of the withdrawal (relative to the cash value) and the terms of your policy, you may be charged income tax on the money you take out. Life insurance companies may also reduce your policy’s death benefit when you withdraw from the cash value, and there is no way to pay it back.

Loans

It is possible to access your policy cash value by taking out a loan from your life insurance provider. This type of loan typically has lower interest rates than a more traditional bank loan. If you do take out a loan and do not pay it back before you die, life insurance companies will deduct the outstanding debt (including interest) from the death benefit. You may also use your life insurance policy’s cash value as loan collateral for a bank loan, but the bank will have it’s own rules and stipulations regarding how much of the cash value they will allow as collateral (usually 50-90% of the cash value). 

Surrender

If you surrender your policy for cash value, you are essentially ending your life insurance contract (thus giving up the death benefit) to receive the cash surrender value. The cash surrender value is the policy’s cash value minus any processing and surrender fees.

Do you have to pay back cash value life insurance?

In general, you are not obligated to pay back policy loans or withdrawals of cash value from your life insurance policy. Any amount you withdraw or borrowed directly from the policy will simply be deducted from your final death benefit (plus interest). 

However, if you use the cash value as collateral on a bank loan, you will be required to pay back that bank loan, in which case the bank will either require you to forfeit the policy for it’s cash value or they will settle the loan using your policy’s death benefit, as in the loan process they have named themselves as the beneficiary.

What happens to the life insurance cash value at death?

When a policyholder dies, their beneficiaries will receive the policy’s death benefit, but not the cash value. In general, whatever money remains in the policy’s cash value will go to the life insurance company. That’s why it is important to use your policy’s cash value strategically while you are living. In some cases, life insurance companies will allow policyholders to transfer their policy’s cash value to the death benefit, increasing what they will leave behind for loved ones, but this must be arranged prior to the policyholder’s death.

When does it make sense to purchase a cash value policy?

In deciding whether a cash value life insurance policy is right for you, it is important to think about your priorities. If you’re looking for a simple, inexpensive way to protect your loved ones financially should you die unexpectedly, a permanent life insurance policy with cash value may not be your best option.

If you are seeking to use life insurance to achieve long-term financial goals, a policy with cash value is highly advantageous. For instance, many people purchase whole life insurance with a view to supplement their retirement incomes using the dividends generated by the policy’s cash value.  

Cash value life insurance also provides a tax-protected investment option. This means that your investment will continue to grow untaxed until it is withdrawn. Even then, you are taxed only on gains. Similarly, some loans taken out against a life insurance policy’s cash value are not subject to tax while the policy remains active.

All that being said, permanent life insurance policies with cash value are substantially more expensive than term life insurance policies. For that reason, they are often chosen by high earners to both pass along wealth to beneficiaries through the death benefit and generate investment income.

Is a life insurance policy with cash value is right for you?

Deciding which life insurance policy is the best depends on you and your family’s financial goals. There is no one-size-fits-all plan, unfortunately—that would make our job way too easy. Permanent life insurance policies with cash value options do come at a higher premium cost compared to term life insurance plans, but they can be extremely beneficial for those looking for a guaranteed death benefit with the added bonus of investment opportunities. 

Let’s have a chat about your financial goals. Book a call with one of our licensed life insurance advisors today! We work with over 30 of Canada’s best life insurance companies and can shop around to make sure you get the policy that’s right for you! 

The information above is intended for informational purposes only and is based on PolicyAdvisor’s own views, which are subject to change without notice. This content is not intended and should not be construed to constitute financial or legal advice. PolicyAdvisor accepts no responsibility for the outcome of people choosing to act on the information contained on this website. PolicyAdvisor makes every effort to include updated, accurate information. The above content may not include all terms, conditions, limitations, exclusions, termination, and other provisions of the policies described, some of which may be material to the policy selection. Please refer to the actual policy documents for complete details. In case of any discrepancy, the language in the actual policy documents will prevail.  All rights reserved.

If something in this article needs to be corrected, updated, or removed, let us know. Email editorial@policyadvisor.com.

While you may have the perfect life insurance policy for your situation and needs, unexpected changes can alter your financial plans. In such circumstances you may have to contemplate cancelling your life insurance policy. This is a big decision which no one should take lightly, and there are larger financial repercussions one should consider before they make major adjustments to their coverage.

Life insurance is an agreement between yourself and an insurance company where you agree to pay them a monthly rate (or premium) in exchange for a lump-sum of tax-free money that will be distributed to your beneficiary(ies) should you pass away during your coverage period. There are different types of life insurance which all have different uses for varying protection needs.

For a breakdown of exactly how life insurance works, please read our Honest Guide to Life Insurance. For more specific information on different types of life insurance, you may find the following articles helpful:

• Five types of life insurance in Canada
• What is term life insurance?
• What is permanent life insurance?
• Term life versus whole life insurance: Which is the better option?

Why might you cancel your life insurance policy?

There are several reasons one might feel they need to cancel their life insurance policy. One of the common reasons would be that their coverage needs have changed. If you purchased a large term life insurance policy to cover a mortgage debt or raising children, but have paid off that mortgage and the children have become financially independent – you may no longer need the large death benefit that you once did years ago. Instead, you may be contemplating a smaller whole life insurance to cover small debts and funeral costs once you pass.

Another common reason some contemplate cancelling their life insurance coverage is affordability. Your personal financial situation may necessitate your having to tighten your budget. If your life insurance premium is a large monthly expense, you may be forced to consider a decision to cancel your coverage to recoup those funds as a last resort. 

Relatedly, some may want to cancel their current life insurance coverage because they’ve secured a better rate elsewhere. For example, you may have secured a rate for term life insurance when you were a smoker – which means much higher rates. If you have quit smoking for twelve months and are able to prove it, you may be able to get a much lower quote for life insurance – even if you are a couple of years older.

If you have a permanent life insurance policy with a cash-value component, you may feel it’s time to use that accumulation of funds elsewhere and that you are better suited utilising the cash yourself. 

Whatever your consideration, make sure to consider the reason you obtained life insurance coverage in the first place. Most of us initially purchase life insurance to financially support our family members and therefore prior to contemplating a cancellation it is important to calculate what your dependents may still need, should something unexpected happen to you. While the amount may be lower than what you initially needed, it’s still good to have a figure in mind when reviewing your coverage needs.

Why you shouldn’t cancel your life insurance policy

While some circumstances may require you contemplate cancelling your insurance, there are plenty of good reasons not to cancel your coverage.

Firstly, the cost of insurance premiums rise as you age and your health changes. The rate for life insurance may be significantly higher if you cancel your coverage and realize later you still need it. 

If your coverage needs have increased and you are therefore seeking new coverage, you should consider keeping the coverage you have at the lower rate, and augmenting your coverage elsewhere. Your existing policy may have optional riders that may allow you to increase coverage.

If budgetary reasons have you contemplating cancelling coverage, it may indicate how important that coverage is to those you may leave behind. In this case, you may want to look at alternatives in your budget which you can cut.

Life insurance cancellation alternatives

While your current coverage may not be the right fit at the moment, you more than likely still need coverage. Some alternatives to outright cancelling your policy are:

• Reducing your coverage – If you no longer need the full amount of coverage and only a smaller portion will do, then you can request the insurance company lower your coverage and accordingly reduce your premiums.
• Purchasing a new term life policy – If your term life policy is coming up for renewal, the renewal premiums will be significantly higher. If you still want coverage to continue and are in good health, you may want to get new coverage in place before you cancel your policy. A new policy will likely cost more, but the premium will be lower than the renewal prices.
• Converting term life to whole life coverage – If you no longer have substantial needs as earlier, you may also convert a smaller portion of the term life policy into a whole life policy, in order to give yourself lifelong coverage, albeit at a smaller amount.
• Select a less expensive option – such as replacing a whole life policy and opting for term life insurance or another option. Keep in mind however that your coverage span will also reduce should you switch from permanent to temporary coverage.
• As discussed, reaching out to your beneficiary or another family member to have them help with the financial obligation of your life insurance premiums.
• Contacting your life insurance provider and seeing what options they provide for those struggling to keep up with their payments.
• With permanent insurance, explore if there is a paid up option. In this case you could use the cash value you’ve accumulated to pay the remaining premiums.
• Speak to a broker. A licensed insurance broker can help you navigate all your options, and provide you with a complete picture of your current coverage and you may be able to find an alternative.

How to cancel your life insurance policy

Depending on your coverage type, there are several options for cancelling your life insurance policy.

If you are cancelling your life insurance, you simply contact your insurance provider by mail, phone, or online (if they offer digital fulfillment services) and let them know you want to cancel your coverage. Make sure you cancel any direct payments you may have set up through your financial institution. 

While not recommended, you can alternatively stop making payments on your term life insurance policy. If your premiums are more than 30 days overdue, your provider will cancel your policy. Opting for this method may negatively affect your ability to get insured in the future.

If you are cancelling your whole life or permanent life insurance policy you have more decisions to make that we’ll get to later around cash value. 

You may also have the option to sell your policy. Some third party companies purchase whole life insurance policies from covered individuals before they pass, and this buyer becomes the new beneficiary of the policy. They pocket the difference in cash between what they paid you for the policy, and what it eventually pays out upon your death. 

Many life insurance companies outright ban this practice, and it is illegal in all provinces except Saskatchewan, New Brunswick, Nova Scotia, and Quebec. Sometimes referred to as stranger or investor owned insurance policies, going down this path can have adverse effects on estate and taxes after death and should be pursued carefully.

Can your life insurance provider cancel your life insurance policy?

A life insurance company has the right to cancel your policy in some specific situations.

If you have not kept up with your life insurance premiums, there is typically a 30 day grace period (1 month after the due date) where you can pay the outstanding fees. If you do not pay your premiums by the end of this grace period, your policy will be cancelled.

If it is discovered that you have misrepresented something in your life insurance application within its first two years of coverage, your provider also has the option to cancel your policy. This can be something like omitting your smoking status or not disclosing a critical illness during medical underwriting. This 2-year window is known as the contestability period. Additionally, a life insurance provider reserves the right to cancel any policy that was approved using fraudulent information.

Who can I talk to about cancelling my life insurance policy?

Cancelling your life insurance coverage is a decision no one takes lightly. Our experienced brokers have years of experience helping Canadians evaluate their current coverage and find out where they can save money on the best coverage possible for their situation. Schedule a call today if you are contemplating cancelling your policy so they can help you make an informed decision about your coverage.